Thanks Camden, a very comprehensive answer! I'll keep mine short and sweet.
In each of your scenarios you have bottom line growth at a higher rate than top line growth. eg: on current multiples, rev growth of 8%, EBIT of 12% and NPAT of 18%. Can I deduce in your modelling you assume improving net profit margins? If that is correct, what is the basis for that assumption given it the trend over the past few years has not been for improving margins?
Also, if you ever think about releasing some of that modelling IP of yours let me know! :) I"m sure there'd be a few HC'er posters keen to get a look. My day job has me spending most of my time building/adjusting financial models within the property sector. Equity analysis is a different beast though, so many moving parts!!
Poie - Can i recommend Ben Graham's 'Intelligent Investor" & 'security analysis, Peter Lynch's "one up on wall st" and "Beating the street) (Be careful, this one will leave you thinking you are an investing superstar just by being a consumer of goods), and Phillip Fisher's 'Common stocks, Uncommon profits). These are all pretty famous value investing textbooks. Especially Graham's texts, who apart from writing probably the most read value investing textbook was also Buffett's mentor. I'm a big fan of all those books (If you look closely enough at my name you can find a few of their names worked in ;).)
DLX Price at posting:
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